How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3814
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I'm trying to figure out 1) if I should be taxed in the

Customer Question

Hi, I'm trying to figure out 1) if I should be taxed in the UK or France (or both), and 2) what I should do about it. Story is: I used to live, work and be taxed in the UK until June 2011. I moved to France fairly informally in June 2011, i.e. not earning money and living in a tent in a French campsite till November 2011. In November 2011 I moved to a flat in France. I earned no income from June 2011 to June 2013 (I just lived off savings, held in a UK bank account). I also made a personal loan of ~£50k during this time to a company in which I'm an 89% shareholder ('Company A'), to spend on setup expenses.
From June 2013 I started to earn money doing some consulting work for a UK company ('Company B'). They paid me as a self-employed consultant / part-time contractor, directly to my personal UK bank account. From June 2015, Company B has paid for my services by paying Company A (into Company A's UK bank account), which has then repaid me part of the loan I made to it. I still get paid that way today (although will have to change that once the £50k loan is fully repaid). I transfer money from my personal UK account to a personal French account via Transferwise roughly every month for living expenses in France.
Since June 2011, I have spent most of my time living in France, though make regular trips back to the UK for my Consulting work (I'm not sure how many - quite a few but less than half the year).
To date I've paid all the tax on the income from my consulting work in the UK, to HMRC. I still have an address in the UK (my sister's). I've not earned any income in France and have not paid any tax in France (or registered with the tax authorities for that matter).
So my questions are:
1) Should I now be paying my income tax in France?
2) Should I have paid my income tax in France before (in prior years)?
3) If yes to 1) or 2), what should I now do?
In an ideal world I would like to get things smoothed out, not get in trouble and also not pay double tax or any massive fines!
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello. I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. When you left the UK for France did you send HMRC a Form P85? If you did not you should do so immediately. Fortunately there are no time constraints as to its submission, it is available on the web and can be filed on line. On receipt HMTC will classify you as non resident for the tax year following your date of departure and furthermore split the leaving year into two portions, one resident and one non resident. Once you are non resident you may visit the UK up to 91 days in any one tax year. In theory this 91 days can be averaged out over four years, but the general consensus of experts on this thread is never to exceed the magic 91. Having regard to your place of residence I am of the opinion that you should be paying tax in France. There is a Double Taxation Convention between the UK and France which precludes the same income stream from being taxed in both jurisdiction. This is achieved by means of tax credits, the tax being paid to one country being allowed as a tax credit against any liability in the second. The Convention does not, however, protect you from differences in rates of taxation. What you must do is now pot your position to a trusted local professional practitioner to arrange your declaration in France. French tax is so complicated and so frequently changing that the use of a local agent is essential. Loans are outside the scope of UK taxation unless interest is earned thereon and that is subject to Income Tax. I do hope that my reply has been of some assistance.
Customer: replied 1 year ago.
Many thanks for your quick response Keith, that's very clear. I'll be sure to send off the P85. One issue I've seen reading up about the procedure (https://www.gov.uk/tax-right-retire-abroad-return-to-uk) is: you can return to visit the UK so long as you don't spend more than 30 days working. I do (and have for the past 4 years) return to the UK and have worked more than 30 days (but probably less than 91). Any idea what the implications would be? Thanks.
Expert:  bigduckontax replied 1 year ago.
Don't worry, just don't exceed the 91 day rule.
Please be so kind as to rate me before you leave the Just Answer site.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

Related Tax Questions